PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the
[x] Definitive Proxy Statement Commission only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(3)(1))
[ ] Soliciting Materials Pursuant to Section 240.14a-11(c) or 240.14a-12
KASH N' KARRY FOOD STORES, INC.
--------------------------------------------
(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2) or Item 22 of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
Not applicable
2) Aggregate number of securities to which transaction applies: Not
applicable
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: Not applicable
4) Proposed maximum aggregate value of transaction: Not applicable
5) Total fee paid: Not applicable
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount previously paid: Not applicable
2) Form, Schedule or Registration Statement No.: Not applicable
3) Filing Party: Not applicable
4) Date Filed: Not applicable
<PAGE>
KASH N' KARRY FOOD STORES, INC.
6422 Harney Road
Tampa, Florida 33610
Notice of Annual Meeting of Stockholders
to be held on December 6, 1995
To all Stockholders of Kash n' Karry Food Stores, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Stockholders of Kash n' Karry Food Stores, Inc. will be held at the
Sheraton Inn Tampa, 7401 East Hillsborough Avenue, Tampa, Florida,
at nine (9:00) o'clock A.M., Eastern Standard Time, on Wednesday,
December 6, 1995, for the following purposes:
1. to elect directors;
2. to ratify and approve the appointment of Coopers &
Lybrand, L.L.P. as independent accountants for the fiscal
years ended July 30, 1995 and July 28, 1996,
respectively;
3. to ratify the 1995 Non-Employee Director Stock Option
Plan adopted on March 9, 1995;
4. to ratify the 1995 Key Employee Stock Option Plan adopted
on March 9, 1995; and
5. to transact such other business as may properly come
before the meeting or any adjournment thereof.
NOTICE IS FURTHER GIVEN that the Board of Directors has fixed
November 10, 1995 as the record date, and only holders of the
Company's Common Stock of record at the close of business on that
date will be entitled to notice of, and to vote at, such Annual
Meeting or any adjournment thereof, but the stock transfer books
will not be closed.
/s/ Raymond P. Springer
-----------------------------------
RAYMOND P. SPRINGER
Secretary
November 17, 1995
PLEASE RETURN THE ENCLOSED PROXY PROMPTLY<PAGE>
KASH N' KARRY FOOD STORES, INC.
6422 Harney Road
Tampa, Florida 33610
PROXY STATEMENT
for
Annual Meeting of the Stockholders
to be held at 9:00 a.m. E.S.T.
on December 6, 1995
at the
Sheraton Inn Tampa
4701 E. Hillsborough Avenue
Tampa, Florida
Approximate Date of First Mailing to Stockholders:
November 17, 1995
GENERAL INFORMATION
The Board of Directors of Kash n' Karry Food Stores, Inc. (the
"Company") solicits your proxy for use at the 1995 Annual Meeting
of Stockholders of the Company to be held on December 6, 1995, and
any adjournment thereof. A form of proxy is enclosed herewith.
All shares represented by proxies sent to the Company to be voted
at the 1995 Annual Meeting will be voted if received in time. Any
stockholder who executes and delivers the proxy may revoke it at
any time prior to its use.
The cost of soliciting the proxies will be borne by the
Company. Directors, officers and regular employees of the Company
may solicit proxies by telephone, facsimile or personal interview.
In addition, the Company will, upon the request of brokers,
dealers, banks and voting trustees, and their nominees, who are
holders of record of shares of the Company's outstanding common
stock (the "Common Stock") on the record date referred to below,
pay their reasonable expenses for completing the mailing of copies
of the Annual Report, of this Notice of Meeting and Proxy
Statement, and of the enclosed form of proxy, to the beneficial
owners of such shares of Common Stock.
VOTING SECURITIES OUTSTANDING
Only holders of issued and outstanding shares of Common Stock
of the Company of record at the close of business on November 10,
1995 are entitled to notice of, and to vote at, the meeting. Each
stockholder is entitled to one vote per share held. The number of
shares outstanding at November 10, 1995 was 4,649,943. A majority
of the shares entitled to vote, and present in person or
represented by proxy, shall constitute a quorum at the meeting.
1<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of October 13, 1995, the
name and address of each person known by the Company to be the
beneficial owner of more than five percent of the outstanding
Common Stock, and, based on information supplied to the Company by
such persons, the approximate number of shares and percentage owned
by each:
Number of
Shares
Name and Address Owned Percent
- -------------------------------------- ----------- -------
American Express Company
American Express Tower
World Financial Center
New York, NY 10285. . . . . . . . . . 972,000(1) 20.9%
American Express Financial Corporation
IDS Tower 10
Minneapolis, MN 55440 . . . . . . . . 972,000(1) 20.9
Green Equity Investors, L.P.
333 S. Grand Avenue
Suite 5400
Los Angeles, CA 90071 . . . . . . . . 1,295,067(2) 27.7
IDS Extra Income Fund, Inc.
IDS Tower 10
Minneapolis, MN 55440 . . . . . . . . 822,430(1) 17.7
The Prudential Insurance Company of America
Prudential Plaza
Newark, NJ 07102-3777 . . . . . . . . 647,448(3) 13.9
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019. . . . . . . . . .. 553,601 11.9
- ------------------------------
(1) American Express Company, American Express Financial
Corporation and IDS Extra Income Fund, Inc. share dispositive
power over 822,430 shares, over which IDS Extra Income Fund,
Inc. has sole voting power. American Express Company and
American Express Financial Corporation also share dispositive
power with IDS Bond Fund, Inc. over an additional 149,570
shares, over which IDS Bond Fund, Inc. has sole voting power.
American Express Company has advised the Company that it
disclaims beneficial ownership with respect to all 972,000
shares.
(2) Includes 9,000 shares subject to an exercisable option.
(3) Includes 42,724 shares held by two wholly-owned subsidiaries
of The Prudential Insurance Company of America.
2<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
Everett L. Buckardt, John G. Danhakl, John J. Delucca,
Jennifer Holden Dunbar, Ben Evans, Thomas W. Harberts, Ronald E.
Johnson, Robert Spiegel and Peter Zurkow have each been nominated
to serve on the Board of Directors for a term of one year and until
their successors are elected and qualified. Each nominee is
currently a Director and has served continuously since becoming a
Director. All nominees have indicated that they are willing and
able to serve as Directors if elected. The nominees will be
elected by a plurality of the votes of the shares entitled to vote,
and present in person or represented by proxy at the meeting.
It is the intention of the persons named in the enclosed form
of proxy to vote such proxy, unless otherwise instructed, "FOR" the
election of the nine persons named above as Directors of the
Company. If any nominee should become unable to serve, or for good
cause will not serve, the Proxies will be voted for the remaining
nominees and, unless the size of the Board of Directors is reduced,
may be voted for a substitute nominee designated by the Board of
Directors.
Biographical Information and Security Ownership
of Directors and Executive Officers
Certain information with respect to each of the directors and
the executive officers listed in the Summary Compensation Table
below relating to principal occupations and directorships, and the
approximate number of shares of the Company's Common Stock
beneficially owned by them, directly or indirectly, has been
furnished to the Company by such directors and executive officers,
and is set forth below.
Name, Age, Position with the Company, Number of
Principal Occupation for the Past Shares Percent
Five Years, Directorships Owned (1)
- ----------------------------------------- ------- -----
Everett L. Buckardt, 62, Director since
1995. 1991-present, Chairman and Chief
Executive Officer of BEKS Investments,
Inc.; 1993-1995, Chairman and Chief
Executive Officer of Warehouse Club,
Inc. (on February 3, 1995, Warehouse
Club, Inc. filed a voluntary petition
for reorganization under Chapter 11 of
the U.S. Bankruptcy Code); 1959-1992,
Sears Roebuck and Company (1988-1992,
President of Sears Catalog and Direct
Marketing Division) . . . . . . . . . . . . 4,500(2) *
3<PAGE>
Richard D. Coleman, 41, Vice President
and Controller since 1988 . . . . . . . . . 3,046(2) *
John G. Danhakl, 39, Director since 1995.
1995-present, General Partner of
Leonard Green & Associates, L.P.;
1990-1995, Managing Director of
Donaldson, Lufkin & Jenrette Securities
Corporation; also a Director of The
Arden Group . . . . . . . . . . . . . . . . 1,295,067(3) 27.7%
John J. Delucca, 52, Director since 1995.
1993-present, Senior Vice President
and Treasurer of RJR Nabisco; 1991-
1993, Managing Director and Chief
Financial Officer of HASCO Associates,
Inc.; 1990-1991, President and Chief
Financial Officer of the Lexington
Group; 1988-1990, Senior Vice President
of Finance and Managing Director of the
Trump Group; also a Director of Edison
Controls Corp. and Enzo Biochem, Inc. . . . 4,500(2) *
Jennifer Holden Dunbar, 32, Director
since 1991. 1989-present, Leonard Green
& Associates, L.P. (1994-present,
General Partner; 1992-1994, Principal;
1989-1992, Associate); also a Director
of Big 5 Holdings Inc., UMC Corporation,
Thrifty Payless, Inc., and Thrifty
PayLess Holdings, Inc. . . . . . . . . . . 1,295,443(3) 27.7
Ben Evans, 66, Director since 1995.
1989-present, Consultant to Ernst &
Young; also a Director of Revco D.S.,
Inc., Jamesway Corporation and
Megafoods Stores, Inc. . . . . . . . . . . . 8,250(4) *
Thomas W. Harberts, 51, Director since
1995. 1994-present, President and
Chief Executive Officer of Cub Foods;
1970 to 1994, Byerly's (1989-1994,
Chief Executive Officer) . . . . . . . . . 4,500(2) *
Ronald E. Johnson, 45, Chairman of the
Board, President and Chief Executive
Officer since 1995. 1990-1995, Farm
Fresh (1993-1995, Chief Operating
Officer; 1990-1993, Senior Vice
President of Store Operations) . . . . . . . 10,155(2) *
4<PAGE>
Anthony R. Petrillo, 53, Former acting
Chief Executive Officer. 1994-1995,
Kash n' Karry Food Stores, Inc.;
1991-1994, independent consultant;
1989-1991, Executive Vice President
of Riser Foods . . . . . . . . . . . . . . -- --
Thomas A. Whipple, 51, Former Executive
Vice President, Marketing. 1988-1995,
Kash n' Karry Food Stores, Inc. . . . . . . -- --
Robert Spiegel, 59, Director since 1995.
Retired; 1984-1995, Chairman and Chief
Executive Officer of RJR Drug
Distributors; also a Director of Graham
Field Health Products, Inc., Hoenig
Group, Inc., and Drug Emporium, Inc. . . . . 19,500(4) *
Raymond P. Springer, 45, Senior Vice
President of Administration, Chief
Financial Officer and Secretary since
1995. 1988-1995, Executive Vice
President of Administration, Chief
Financial Officer . . . . . . . . . . . . . 9,139(2) *
Peter Zurkow, 42, Director since 1995.
1992-present, PaineWebber Incorporated
(1995-present, Managing Director, High
Yield Department); 1986-1992, Schroder
Wertheim . . . . . . . . . . . . . . . . . . 4,500(2) *
All Directors and Executive Officers
as a group (14 persons) (2)-(4) . . . . . . 1,381,812 29.2%
- ------------------------------
* Less than 1%
(1) Based on 4,726,562 shares of Common Stock outstanding, which
includes 76,619 shares subject to exercisable options.
(2) The number of shares owned by Messrs. Buckardt, Coleman,
Delucca, Harberts, Johnson, Springer, Zurkow and certain other
executive officers not listed in the Summary Compensation
Table, consists of shares that are subject to exercisable
options granted under the Company's 1995 Non-Employee Director
Stock Option Plan and 1995 Key Employee Stock Option Plan, as
applicable.
(3) Includes 1,295,067 shares owned by Green Equity Investors,
L.P. (including 9,000 shares subject to an exercisable
option), of which Leonard Green & Associates, L.P. ("LGA"), is
the sole general partner. Ms. Dunbar may be deemed to be the
5<PAGE>
beneficial owner of such shares by reason of her being the
controlling shareholder of a General Partner of LGA, and Mr.
Danhakl may be deemed to be the beneficial owner of such
shares by reason of his being a General Partner of LGA.
(4) The number of shares owned by Messrs. Evans and Spiegel
includes 4,500 shares each that are subject to exercisable
options granted under the Company's 1995 Non-Employee Director
Stock Option Plan.
Certain Relationships and Related Transactions
From August to December 1994, LGA performed financial advisory
services for the Company in consideration for reimbursement of
related out-of-pocket expenses. In December 1994, the Company
completed a comprehensive financial restructuring pursuant to a
confirmed "prepackaged" plan of reorganization under Chapter 11 of
the U.S. Bankruptcy Code (the "Restructuring"). As part of the
Restructuring, on December 29, 1994 the Company entered into a
Management Services Agreement with LGA. Pursuant to the Management
Services Agreement, LGA agreed to provide to the Company
management, consulting, financial planning and financial advisory
services for a two year term, in consideration for an annual fee of
$200,000. The amount of such fee was determined in the course of
negotiations among LGA, the Company and an unofficial bondholders'
committee during the Restructuring. LGA is not required to spend
a fixed number of hours of service to the Company pursuant to the
Management Services Agreement. During fiscal 1995, the Company
paid a total of $117,000 to LGA, representing the annual fee under
the Management Services Agreement, prorated for the portion of the
fiscal year subsequent to December 29, 1994. During the same
period, LGA expended approximately fifty hours of service to the
Company pursuant to the Management Services Agreement and the pre-
existing relationship.
LGA is the sole general partner of Green Equity Investors,
L.P., which owned approximately 60.9% of the Company's outstanding
Common Stock immediately prior to the consummation of the
Restructuring, and which owned approximately 27.7% of the Company's
outstanding Common Stock as of October 13, 1995. Jennifer Holden
Dunbar, who is a director of the Company, is the controlling
shareholder of a General Partner of LGA, and John G. Danhakl, also
a director of the Company, is a General Partner of LGA.
From time to time, PaineWebber Incorporated provides financial
advisory services to the Company. As of October 13, 1995,
PaineWebber Incorporated owned approximately 11.9% of the
outstanding Common Stock of the Company. See "Principal
Stockholders." Peter Zurkow, who is a director of the Company, is
a Managing Director of the High Yield Department of PaineWebber
Incorporated.
6<PAGE>
Donaldson, Lufkin & Jenrette ("DLJ") provided investment
banking services to the Company in connection with the
Restructuring. Prior to March 1995, John G. Danhakl, a Director of
the Company, was a Managing Director of DLJ.
Meetings of the Board and Committees
In conjunction with the consummation of the Restructuring, the
Company's Board of Directors was reconstituted in December 1994.
As of December 29, 1994, all of the former Directors resigned,
except for Jennifer Holden Dunbar and Christopher V. Walker, and
Everett L. Buckardt, John J. Delucca, Ben Evans, Thomas W.
Harberts, Anthony R. Petrillo, Robert Spiegel and Peter Zurkow were
appointed to succeed the resigning Directors. Each of those
Directors was selected pursuant to an understanding among the
Company, Green Equity Investors, L.P. and an unofficial bondholders
committee. On March 9, 1995, Mr. Petrillo resigned as a Director
and the remaining Directors appointed Ronald E. Johnson to succeed
him. On July 7, 1995, Mr. Walker resigned as a Director in
conjunction with his resignation as a General Partner of LGA, and
on August 18, 1995, the remaining Directors appointed John G.
Danhakl to succeed Mr. Walker.
During the fiscal year ended July 30, 1995, the Board of
Directors held five regular meetings and three special meetings.
Each Director attended at least 75% of the total number of meetings
held by the Board, and all Board committees on which such Director
served, during such Director's tenure on the Board.
Since January 17, 1995, the Board of Directors of the Company
has had standing audit, compensation and nominating committees.
The Audit Committee is composed of Ms. Jennifer Holden Dunbar
and Messrs. Everett L. Buckardt, Ben Evans and Thomas W. Harberts.
The Audit Committee reviews the scope and results of the audit by
independent auditors, approves the type of non-audit services
performed by independent auditors, and makes recommendations as to
the selection of independent auditors. It also reviews the scope
of internal audits, systems of internal controls, and accounting
policies and procedures.
The Compensation Committee is composed of Ms. Jennifer Holden
Dunbar and Messrs. Ben Evans and Peter Zurkow. The Compensation
Committee determines the compensation payable to executive officers
and other key employees of the Company and makes recommendations to
the Board of Directors with respect to compensation plans
applicable to employees of the Company. Members of the
Compensation Committee also serve on the Stock Option Committee.
The Nominating Committee is composed of Ms. Jennifer Holden
Dunbar and Messrs. Ben Evans and Peter Zurkow. The Nominating
7<PAGE>
Committee recommends qualified candidates to fill vacancies on the
Board of Directors. The Nominating Committee will consider
nominees recommended by stockholders. Stockholders desiring to
suggest nominees for Directors may do so by submitting names in
writing to the Secretary of the Company, together with biographical
data and qualifications of the nominees.
Compliance with Section 16(a) of the Exchange Act
The Company's Common Stock first became registered under
Section 12(g) of the Securities Exchange Act of 1934 in December
1994, and its confirmed Plan of Reorganization was consummated on
December 29, 1994. Pursuant to the confirmed Plan of
Reorganization, on December 29, 1994 the Board of Directors of the
Company was reconstituted, the then outstanding Common Stock was
cancelled, and new Common Stock was issued to the former holders of
the Company's $105.0 million 14% Subordinated Debentures due 2001
and to Green Equity Investors, L.P. The then officers and
directors of the Company, Green Equity Investors, L.P. and
PaineWebber Incorporated each filed a Form 3 during the fiscal year
ended July 30, 1995, but after the due date thereof. To the
knowledge of the Company, The Prudential Insurance Company of
America and IDS Extra Income Fund, Inc. each beneficially own 10%
or more of the Company's Common Stock, but did not file a Form 3
during the fiscal year ended July 30, 1995.
Except as set forth above, the Company is not aware of any
failure by any person who, at any time during the fiscal year ended
July 30, 1995, was a director or officer of the Company, or the
beneficial owner of 10% or more of its Common Stock, to file on a
timely basis reports required by Section 16(a) of the Exchange Act
during such fiscal year.
Compensation of Directors and Executive Officers
Compensation of Directors
Each Director receives $12,500 per year (payable quarterly),
plus $2,500 for each Board meeting, and $1,000 for each meeting of
a committee to which such Director is a member, not held on the
same day as a Board meeting. In addition, each Director is
reimbursed for reasonable and necessary out-of-pocket expenses
incurred in connection with attending such meetings in person. The
cash compensation payable to Directors affiliated with LGA is
credited against the annual management fee payable to LGA. See
"Certain Relationships and Related Transactions." As of October
13, 1995, Ms. Dunbar and Mr. Danhakl were the only directors
affiliated with LGA. Directors who are also employees are not paid
an annual Director fee or a fee for attending meetings.
8<PAGE>
In March 1995, the Company adopted the 1995 Non-Employee
Director Stock Option Plan, pursuant to which it granted to certain
of its Directors options to purchase a total amount of 54,000
shares of Common Stock. On the same date, in lieu of granting
options to the Directors affiliated with LGA, the Company granted
to Green Equity Investors, L.P. options to purchase 18,000 shares
of Common Stock. See "Proposal 3 - Ratification of 1995 Non-
Employee Director Stock Option Plan."
Compensation of Executive Officers
Summary Compensation Table
The following table sets forth compensation for the fiscal
years ended July 30, 1995, July 31, 1994 and August 1, 1993,
respectively, awarded to, earned by, or paid to the Chief Executive
Officer and the acting Chief Executive Officer of the Company
during the fiscal year ended July 30, 1995, the most highly
compensated executive officers of the Company, other than the Chief
Executive Officer, who were serving as such as of July 30, 1995
(excluding executive officers whose total annual salary and bonus
for the fiscal year ended July 30, 1995 did not exceed $100,000),
and the individuals who would have been among that group but for
the fact that they no longer served as executive officers of the
Company as of July 30, 1995 (collectively, the "Named Executive
Officers"):
Long-
Term
Compen-
sation
Awards
------
No. of
Secur- All
Annual Compensation ities Other
Name and ------------------ Under- Compen-
Principal Salary Bonus lying sation
Position Year (1) (1) Options (2)
- ---------------------- ---- -------- --------- ------ --------
Anthony R. Petrillo(3) 1995 $454,000 $ -- -- $200,000
Former Acting Chief 1994 -- -- -- --
Executive Officer 1993 -- -- -- --
Ronald E. Johnson(4) 1995 $167,691 $ 84,144 50,773 $ 49,355
Chairman of the Board, 1994 -- -- -- --
President, and Chief 1993 -- -- -- --
Executive Officer
9<PAGE>
Continuation of Summary Compensation Table
Raymond P. Springer 1995 $181,046 $100,000 45,696 $ 10,394
Senior Vice President, 1994 177,298 -- -- 11,910
Administration, and 1993 131,233 15,000 -- 51,832
Secretary
Thomas A. Whipple(5) 1995 $117,040 $ -- -- $270,820
Former Executive 1994 118,331 -- -- 3,073
Vice President, 1993 60,923 -- -- 787
Marketing
Richard D. Coleman 1995 $106,701 $ 40,000 15,232 $ 3,016
Vice President, 1994 100,000 -- -- 2,574
Controller 1993 95,481 5,000 -- 6,682
- ----------------------
(1) Includes amounts deferred at the election of the Named
Executive Officers under the Company's Retirement Estates
401(k) Plan (the "KKRE"), a trusteed defined contribution
plan, its nonqualified unfunded supplemental salary deferral
plan (the "KESP"), and its nonqualified unfunded bonus
deferral compensation plan.
(2) Information provided for 1995 represents: (i) an exit bonus
paid to Mr. Petrillo in the amount of $200,000; (ii) matching
contributions by the Company under its KKRE for the benefit of
Messrs. Springer, Whipple and Coleman in the amounts of
$1,365, $820 and $814, respectively, (iii) matching
allocations by the Company under its KESP for the benefit of
Messrs. Johnson, Springer and Coleman in the amounts of
$4,313, $8,412 and $1,688, respectively, (iv) above-market
interest recorded by the Company under its KESP for the
benefit of Messrs. Johnson, Springer and Coleman in the
amounts of $42, $1,162 and $514, respectively, (v) a signing
bonus paid to Mr. Johnson in the amount of $45,000, and
(vi) severance payments to Mr. Whipple in the amount of
$270,000.
(3) Anthony R. Petrillo served as acting Chairman of the Board,
acting President and acting Chief Executive Officer from
August 1, 1994 to January 31, 1995, and as a consultant to the
Company from January 31, 1995 through July 30, 1995.
(4) Ronald E. Johnson joined the Company as Chairman of the Board,
President and Chief Executive Officer effective as of January
31, 1995.
(5) Thomas A. Whipple resigned in March 1995.
10<PAGE>
Pending Severance Claim by Former Chief Executive Officer
On December 30, 1994, the Company's former chief executive
officer, Ronald J. Floto, filed a proof of claim in the Company's
bankruptcy proceeding seeking payments allegedly owed to him in
connection with his severance from the Company. Mr. Floto's claim
seeks benefits allegedly owed to him in connection with his
severance from the Company under certain employee benefit plans
(the "Floto Agreements") and other compensation agreements between
Mr. Floto and the Company. The total principal amount of Mr.
Floto's claim is less than $1.5 million.
On March 9, 1995, the Board of Directors of the Company
appointed a committee to act as Plan Administrator under the Floto
Agreements (the "Plan Administration Committee"). In response to
the Company's objection to the proof of claim, on May 18, 1995, the
bankruptcy judge entered an order holding Mr. Floto's claims in
abeyance pending exhaustion of the claims review procedure set
forth in the Floto Agreements. On June 9, 1995 the Plan
Administration Committee rendered its written determination denying
benefits to Mr. Floto. Mr. Floto waived his right to seek a review
by the Plan Administration Committee of its decision, and referred
his claim back to the bankruptcy court for final determination.
Stock Option Grants in Last Fiscal Year
In March 1995, the Board of Directors adopted a Key Employee
Stock Option Plan (the "Key Employee Plan"). See "Proposal 4 -
Ratification of 1995 Key Employee Stock Option Plan." The
following table sets forth certain information with respect to
options granted pursuant to the Key Employee Plan to the Named
Executive Officers during the 1995 fiscal year:
% of Total
Options
Number of Granted
Securities to Em- Potential Realizable
Under- ployees Expira- Value at Assumed
Lying in Exer- tion Annual Rates of Stock
Options Fiscal cise Date Price Appreciation
Granted Year Price in for Option Term
Name (#) (1) ($/Sh) 2005 0% 5% 10%
- ------------- ------ ---- ----- ---- -------- -------- --------
A.R. Petrillo -- --% $-- -- $ -- $ -- $ --
R.E. Johnson 50,773 20.4 10 3/8 118,301 192,831 306,400
R.P. Springer 45,696 18.4 10 3/8 106,472 173,549 275,762
T.A. Whipple -- -- -- -- -- -- --
R.D. Coleman 15,232 6.1 22 7/27 11,424 18,621 29,588
- -------------
(1) Determined without regard to options to purchase 30,463 shares
granted to a former executive officer of the Company, which
lapsed in June 1995 prior to vesting.
11<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year End Option Values
None of the options granted under the Key Employee Plan were
exercised during the 1995 fiscal year. The following table sets
forth information concerning the value of the unexercised options
granted under the Key Employee Plan held by the Named Executive
Officers as of July 30, 1995:
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Year End Fiscal Year End(1)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- -------------------- -------------- -----------------
Anthony R. Petrillo. . . . . -- / -- $ -- /$ --
Ronald E. Johnson. . . . . . 10,155/40,618 129,476/ 517,880
Raymond P. Springer. . . . . 9,139/36,557 116,522/ 466,102
Thomas A. Whipple. . . . . . -- / -- -- / --
Richard D. Coleman . . . . . 3,046/12,186 2,285/ 9,139
- ------------------
(1) As of July 30, 1995, the average of the high ask and low bid
prices of the underlying Common Stock was $22.75 per share, as
reported on the Nasdaq Small Cap Market.
Employment Contracts and Termination of Employment and Change-
of-Control Arrangements
Ronald E. Johnson entered into an employment agreement with
the Company for a three-year term commencing in January 1995.
Under the employment agreement, the Company agreed to pay to Mr.
Johnson a base salary of $325,000 and to allow him to participate
proportionally in all fringe benefit plans available to the most
senior executive officers of the Company from time to time during
the term. Employment under the agreement may be terminated for
cause or without cause in certain circumstances (as defined
therein), including Mr. Johnson's death or disability. Upon a
termination without cause, Mr. Johnson is entitled to continuation
of salary and, in certain circumstances, benefits and bonus,
through the term of the employment agreement. Mr. Johnson's
agreement also provides that options granted to him under the Key
Employee Plan will become fully vested upon a termination of his
employment without cause. The agreement contains certain
requirements of noncompetition, including a requirement of
noncompetition for a period of one year following a termination of
employment, other than a termination without cause.
12<PAGE>
The Company has severance pay agreements with Raymond P.
Springer and Richard D. Coleman, and with certain other key
employees who are not executive officers of the Company. The
severance pay agreements provide, among other things, that if the
employee is terminated without Cause (as defined therein) in
connection with a Change of Control (as defined therein) then such
employee will be entitled to payment based on a certain percentage
of that employee's annual compensation. In the case of Mr.
Springer and Mr. Coleman, the severance payment is based on 100% of
their respective annual compensation (approximately $270,000 in the
case of Mr. Springer, and approximately $149,500 in the case of Mr.
Coleman). In the case of the non-executive officers, the severance
payment is based on 50% of their respective annual compensation.
The Company maintains the Kash n' Karry Retirement Estates
("KKRE"), a trusteed defined contribution retirement plan. KKRE is
a tax savings/profit sharing plan maintained for the purpose of
providing retirement income for eligible employees of the Company.
KKRE is qualified under Section 401(a) and Section 401(k) of the
Internal Revenue Code of 1986, as amended. Generally, all
employees who have attained the age of 21 years and complete one
year of participation service (as defined under KKRE) are eligible
to participate in KKRE. During the 1995 fiscal year, Messrs.
Springer, Whipple and Coleman were the only Named Executive
Officers who participated in KKRE.
Certain members of senior management and other key employees
participate in the Kash n' Karry Executive Supplemental Retirement
Plan ("KESP"), a non-qualified, unfunded salary deferral plan.
During the 1995 fiscal year, Messrs. Johnson, Springer and Coleman
were the only Named Executive Officers who participated in KESP.
Prior to the beginning of each plan year, a participant may elect
to defer an amount not to exceed 15% of such participant's annual
base compensation (as defined under KESP). The Company matches a
certain portion of the amount deferred by the participant, but the
amount of the match may not exceed 6% of such participant's annual
base compensation. The Company records income to the participant's
account at an annual rate as determined by the Board of Directors,
but the rate of such income shall not be less than 8% per annum.
The vested percentage of the amounts recorded in the participant's
account will be paid to the participant upon the earlier of: (i)
such participant's death, disability, retirement or other
separation of service from the Company; (ii) the date the Plan is
terminated; or (iii) the date that a change in control occurs (as
defined under KESP).
Certain members of senior management and other key employees
also participate in the Company's Bonus Deferral Compensation Plan,
a non-qualified, unfunded salary deferral plan. During the 1995
fiscal year, Messrs. Springer and Coleman were the only Named
Executive Officers who participated in the Bonus Deferral
Compensation Plan. Prior to the end of each plan year, and at
13<PAGE>
least 30 days prior to the actual date of the ascertainment and
grant of bonus compensation to a participant, a participant may
elect to defer a portion of the bonus compensation payable to such
participant for the plan year. The Company records income to the
participant's account at an annual rate as determined by the Board
of Directors, but the rate of such income shall not be less than 8%
per annum. The amounts recorded in the participant's account will
be paid to the participant upon the earlier of: (i) such
participant's death, disability, retirement or other separation of
service from the Company; (ii) the date the plan is terminated; or
(iii) the occurrence of an unforeseeable emergency (as defined
therein) with respect to a participant.
Compensation Committee Interlocks and Insider Participation
The Board of Directors has established a Compensation
Committee and a Stock Option Committee. The Compensation Committee
approves compensation payable to the executive officers and the
Stock Option Committee administers the Company's stock option
plans. Currently, Jennifer Holden Dunbar, Ben Evans and Peter
Zurkow comprise both such committees.
Ms. Dunbar is the controlling shareholder of a General Partner
of LGA. LGA is the general partner of Green Equity Investors,
L.P., which owned approximately 27.7% of the Company's Common Stock
as of October 13, 1995. See "Principal Stockholders."
From August to December 1994, LGA performed financial advisory
services to the Company in consideration for reimbursement of
related out-of-pocket expenses. As part of the Restructuring, on
December 29, 1994 the Company entered into a Management Services
Agreement with LGA. Pursuant to the Management Services Agreement,
LGA agreed to provide to the Company management, consulting,
financial planning and financial advisory services for a two year
term, in consideration for an annual fee of $200,000. The amount
of such fee was determined in the course of negotiations among LGA,
the Company and an unofficial bondholders' committee during the
Restructuring. LGA is not required to spend a fixed number of
hours of service to the Company pursuant to the Management Services
Agreement. During fiscal 1995, the Company paid a total of
$117,000 to LGA, representing the annual fee under the Management
Services Agreement, prorated for the portion of the fiscal year
subsequent to December 29, 1994. During the same period, LGA
expended approximately fifty hours of service to the Company
pursuant to the Management Services Agreement and the pre-existing
relationship.
Mr. Zurkow is a Managing Director of the High Yield Department
of PaineWebber Incorporated. From time to time, PaineWebber
Incorporated provides financial advisory services to the Company.
As of October 13, 1995, PaineWebber Incorporated owned
approximately 11.9% of the outstanding Common Stock of the Company.
See "Principal Stockholders."
14<PAGE>
Board Compensation Committee Report on Executive Compensation
The Compensation Committee of the Company, whose members are
listed below, is composed entirely of non-employee Directors.
Actions by the Compensation Committee are reported to the Board of
Directors and, in appropriate cases, ratified by the Board prior to
implementation. The Company's policy with respect to executive
compensation has been designed to: attract and retain qualified
persons to serve as executive officers of the Company; adequately
and fairly compensate executive officers in relation to their
responsibilities, capabilities and contributions to the Company and
in a manner that is commensurate with compensation paid by
companies of comparable size or within the Company's industry;
reward executive officers for the achievement of short-term
operating goals; and align the interests of executive officers with
those of the Company's stockholders with respect to short-term and
long-term operating results.
The primary components of compensation paid by the Company to
its executive officers are base salary, annual incentive
compensation, and stock options. The relationship of each
component is discussed below.
Base Salary. The base salary component of executive
compensation is designed to reflect the overall responsibility, the
position's risk/reward profile, market place salary trends and the
performance of the incumbent within the position. Each year the
Compensation Committee reviews and approves the base salaries to be
paid by the Company during the following year to members of senior
management, based on recommendations proposed by the Chief
Executive Officer. Annual adjustments to base salaries are
determined based on a number of factors, including the Company's
performance and the executives' contributions to the Company's
performance. As is typical for most companies, payment of base
salary amounts generally is not conditioned upon the achievement of
any specific pre-determined performance targets.
Annual Incentive Compensation. The annual incentive
compensation component of executive compensation consists of a cash
bonus, with award opportunities tied to the position's potential
contribution to performance against predetermined performance
goals. The performance goals, which are adjusted annually, consist
of an objective portion based on the Company's performance in
relation to annual budgets approved by the Board of Directors, and
a subjective portion based on the individual's achievement of
personal development and customer service goals determined by the
individual and his or her supervisor. An additional bonus may be
granted to an executive officer for exceptional services to the
Company as approved by the Compensation Committee.
Stock Options. In early 1995, the Company engaged Houlihan,
Lokey, Howard & Zukin to recommend a stock option plan to align the
15<PAGE>
interests of the key employees with those of the Company's
stockholders with respect to short-term and long-term operating
results. Based upon the report issued by Houlihan, Lokey, the
Board of Directors adopted the 1995 Key Employee Stock Option Plan,
pursuant to which options to purchase common stock of the Company
may be granted to certain key employees, including executive
officers. The Stock Option Committee (whose members consist of the
members of the Compensation Committee) has the discretion to set
the exercise price of options granted under the plan. During
fiscal 1995, options to purchase a total of 248,787 shares of
common stock were granted to key employees, of which options to
purchase a total of 203,090 shares were granted to incumbent
executive officers. The average exercise price per share of
options granted in 1995 was $14.41. The options vest 20% per year
over a five year period.
Other Components of Executive Compensation. In addition to
the base salary, annual incentive compensation, and stock options,
the Company's executive officers are eligible to participate in its
401(k) plan (upon their attainment of one year of service to the
Company), its unfunded nonqualified supplemental retirement plan,
its unfunded nonqualified bonus compensation deferral plan, and
certain other employee benefit plans offered to employees of the
Company generally. Each of the executive officers are also
entitled to automobile allowances and other perquisites. To
encourage the retention of executive officers, several of them
participate in a severance pay plan adopted in 1994, which provides
certain benefits to the participants in the event that their
employment is terminated within a certain period of time before or
after a change of control of the Company. Several other executive
officers, including the Chief Executive Officer, are parties to
employment agreements having terms expiring in January 1998, which
provide for salary continuation through the end of the term in the
event their employment is terminated without cause.
CEO Compensation. The compensation of the Chief Executive
Officer for the last fiscal year was based on the foregoing
factors, taking into consideration his unique role in transitioning
the Company through the post-Restructuring period.
Tax Deductibility of Executive Compensation. Legislation
enacted in 1993 imposes new limits on the tax deductibility of
executive compensation. The Compensation Committee's policy is to
maximize the tax deductibility of executive compensation to the
extent consistent with its responsibility to effectively compensate
executives based on performance.
This report is submitted by the members of the Compensation
Committee:
Members of the Compensation Committee
-------------------------------------
Jennifer Holden Dunbar
Ben Evans
Peter Zurkow
16<PAGE>
Stock Performance Graph
The following graph provides a comparison of the seven month
cumulative total return for the Company, the Russell 2000 Index,
and a peer group of five companies.(1) The comparison covers the
period from the effective date of the Company's financial
restructuring pursuant to its confirmed plan of reorganization
(December 29, 1994) through and including the last trading day of
the Company's fiscal year ended July 30, 1995 (July 28, 1995). The
comparison assumes that $100 was invested at the beginning of the
period, and also assumes reinvestment of dividends.
Seven Month Comparison
[Graph omitted]
Measurement
Point
12/29/94 7/28/95
----------- ---------
Kash n' Karry Food Stores, Inc. $100.00 $227.50
Russell 2000 Index 100.00 121.22
Peer Group(1) 100.00 116.61
(1) The selected peer group consists of the following companies:
Eagle Food Centers, Buttrey Food and Drug Co., Delchamps,
Inc., Marsh Supermarkets, Inc. and Ingles Markets.
17<PAGE>
PROPOSAL 2 - RATIFICATION AND APPROVAL OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
Action is to be taken at the Annual Meeting with respect to
the ratification and approval of the appointment by the Board of
Directors of the Company of Coopers & Lybrand, L.L.P. as
independent public accountants to audit the books of the Company
for the fiscal years ended July 30, 1995 and July 28, 1996,
respectively. Proposal 2 will be adopted if it is approved by a
majority of the shares entitled to vote at the meeting, present in
person or represented by proxy.
Representatives of Coopers & Lybrand, L.L.P. are expected to
be present at the Annual Meeting and will have an opportunity to
make such statements as they may desire. Such representatives are
expected to be available to respond to appropriate questions from
stockholders.
It is the intention of the persons named in the enclosed form
of proxy to vote such proxy, unless otherwise instructed, "FOR"
Proposal 2.
Changes in Accountants from Prior Periods
On February 17, 1995, the Company engaged Coopers & Lybrand,
L.L.P. as the principal accountants to audit the Company's
financial statements for the fiscal year ending July 30, 1995, and
dismissed KPMG Peat Marwick LLP ("KPMG"). The Company did not
consult with Coopers & Lybrand, L.L.P. regarding accounting advice
prior to its engagement.
KPMG had been engaged since 1988 as the principal accountants
to audit the Company's financial statements. KPMG's report on the
financial statements of the Company as of July 31, 1994 and for the
52 weeks ended July 31, 1994 and August 1, 1993 contained no
adverse opinion or disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope, or accounting principles,
except that KPMG's report contained a separate paragraph stating
that "Kash n' Karry Food Stores, Inc. has suffered recurring losses
from operations and has a net capital deficiency. As discussed in
note 1 to the financial statements, Kash n' Karry Food Stores, Inc.
filed a pre-packaged petition under Chapter 11 of the United States
Bankruptcy Code on November 9, 1994 and these matters raise
substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustments that might
result from the outcome of this uncertainty." The Company's plan
of reorganization was approved by the bankruptcy court on December
12, 1994 and became effective on December 29, 1994.
18<PAGE>
The decision to change accountants was approved by the Board
of Directors of the Company. During the Company's two most recent
fiscal years and any subsequent interim period preceding the
dismissal, there were no disagreements between the Company and KPMG
on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not
resolved to the satisfaction of KPMG would have caused KPMG to make
reference to the subject matter of the disagreement in connection
with its report. Also, during the aforementioned period, there
occurred no "reportable event" within the meaning of Item
304(a)(1)(v) of Regulation S-K of the Commission.
PROPOSAL 3 - RATIFICATION OF
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Director Plan
On March 9, 1995, the Board of Directors adopted the 1995 Non-
Employee Director Stock Option Plan (the "Director Plan"). The
primary purpose of the Director Plan is to enable the Company to
retain the experienced and knowledgeable non-employee Directors
whose initial election to the Board became effective upon or after
consummation of the Company's Restructuring on December 29, 1994.
Pursuant to the Director Plan, the Company may grant options to
purchase up to 54,000 shares of Common Stock to eligible Directors.
Directors who are also employees of or consultants to the Company
are not eligible to participate in the Director Plan. The Director
Plan is administered by the Stock Option Committee of the Board of
Directors, and expires on March 8, 2005.
Initial Grants
The Director Plan provides for a one-time grant to each
eligible Director serving in such capacity on March 9, 1995 of
options to purchase 4,500 shares of Common Stock for $10.00 per
share, vesting on July 30, 1995, and options to purchase an
additional 4,500 shares of Common Stock for $13.33 per share,
vesting on July 28, 1996. Options to purchase a total of 54,000
shares of Common Stock were granted to eligible Directors on March
9, 1995. All of such options expire on March 8, 2005, or earlier
upon the occurrence of certain events. If any options granted
under the Director Plan lapse by reason of the voluntary
termination (as defined therein) with respect to an optionee, the
Stock Option Committee has the discretion to grant subsequent
options to eligible Directors elected to fill the vacancy left by
the participant who caused the voluntary termination, and to
determine the number of options to be granted to a succeeding
Director, the exercise price per share, and the vesting schedule
applicable to such option grant.
19<PAGE>
The following table sets forth the option awards made to
eligible Directors during the fiscal year ended July 30, 1995:
Level One Grants(1) Level Two Grants(2)
------------------- -------------------
Exercise Exercise
No. of Price Per No. of Price Per
Optionee Shares Share ($) Shares Share ($)
- ---------------------- ------ --------- ------ ---------
Everett L. Buckardt 4,500 $10.00 4,500 $13.33
John J. Delucca 4,500 $10.00 4,500 $13.33
Ben Evans 4,500 $10.00 4,500 $13.33
Thomas W. Harberts 4,500 $10.00 4,500 $13.33
Robert Spiegel 4,500 $10.00 4,500 $13.33
Peter Zurkow 4,500 $10.00 4,500 $13.33
- ---------------------
(1) Level One Grants vested on July 30, 1995.
(2) Level Two Grants vest on July 28, 1996.
Other Options
On the same date, in lieu of granting options under the
Director Plan to the two Directors affiliated with LGA, the Company
granted to Green Equity Investors, L.P. ("GEI") options to purchase
9,000 shares of Common Stock for $10.00 per share, vesting on July
30, 1995, and options to purchase an additional 9,000 shares of
Common Stock for $13.33 per share, vesting on July 28, 1996. GEI
is a principal stockholder of the Company. See "Principal
Stockholders." The terms of the options granted to GEI are
substantially the same as the terms of the options granted under
the Director Plan.
Tax Consequences
The options granted under the Director Plan are nonqualified
stock options for Federal income tax purposes. Accordingly, the
grant of an option under the Director Plan has no tax consequences
for either the optionee or the Company. Upon the exercise of
options granted under the Director Plan, the optionees will realize
ordinary income in an amount equal to the excess of (a) the fair
market value (on the later of the exercise date, or six months
after the date of grant) of the underlying shares of Common Stock
acquired over (b) the exercise price. The Company will be entitled
a deduction in an amount equal to the amount included as ordinary
income by the optionee.
20<PAGE>
Stock Valuation
As of October 13, 1995, the average of the high ask and low
bid prices of the underlying Common Stock was $23.75 per share, as
reported on the Nasdaq Small Cap Market.
Required Vote for Ratification
The Director Plan is effective in accordance with its terms
upon approval by the Board of Directors. If the holders of a
majority of the outstanding shares of Common Stock entitled to
vote, and present in person or represented by proxy, vote in favor
of the ratification of the Director Plan, the Director Plan shall
be deemed to have been ratified by the stockholders. For purposes
of determining whether Proposal 3 has been adopted, abstentions
will be counted as votes against the proposal, and broker nonvotes
will not be counted in determining the number of shares entitled to
vote and present in person or represented by proxy.
It is the intention of the persons named in the enclosed form
of proxy to vote such proxy, unless otherwise instructed, "FOR"
Proposal 3.
PROPOSAL 4 - RATIFICATION OF 1995 KEY EMPLOYEE STOCK OPTION PLAN
The Key Employee Plan
On March 9, 1995, the Board of Directors adopted a Key
Employee Stock Option Plan (the "Key Employee Plan"), which is
administered by the Stock Option Committee of the Board of
Directors. Pursuant to the Key Employee Plan, the Company may
grant options to purchase up to 355,419 shares of Common Stock to
key employees of the Company designated by the Stock Option
Committee from time to time. The Stock Option Committee has the
discretion to determine the number of options to be granted to an
eligible participant, the exercise price per share, whether the
options will be non-qualified stock options or incentive stock
options, and the vesting schedule applicable to a given option
grant. The Key Employee Plan expires on March 9, 2005.
Initial Options
During the fiscal year ended July 30, 1995, the Stock Option
Committee granted to a total of ten key employees of the Company
(including seven executive officers) options to purchase the
aggregate amount of 279,249 shares of Common Stock under the Key
21<PAGE>
Employee Plan (the "Initial Options"), of which options to purchase
30,463 shares of Common Stock lapsed prior to vesting.
The table below separately states the number of Initial
Options, and the exercise price per share, granted to the following
persons:
No. of Shares Exercise
Underlying Price
Initial Options Per Share
Name and Position Granted (#) ($)
- ------------------------------ --------------- ---------
Anthony R. Petrillo
Former Chief Executive Officer -- $ --
Ronald E. Johnson
Chairman of the Board, President
and Chief Executive Officer 50,773 10.00
Raymond P. Springer
Senior Vice President of
Administration, Chief
Financial Officer, Secretary 45,696 10.00
Thomas A. Whipple
Former Executive Vice President
of Marketing -- --
Richard D. Coleman
Vice President, Controller 15,232 22.00
All current executive officers as
as group (6 persons) 203,090 12.70(1)
All employees, including all
current officers who are not
executive officers (9 persons)(2) 248,787 14.41(1)
- --------------------
(1) Average exercise price.
(2) Determined without regard to options to purchase 30,463 shares
granted to a former executive officer of the Company, which
lapsed in June 1995 prior to vesting.
The Initial Options vest in serial increments in the amount of
20% per year, on the last day of each of the 1995, 1996, 1997, 1998
and 1999 fiscal years of the Company. However, upon the occurrence
of a Merger Event or a Change of Control (as defined in the Key
Employee Plan), the Initial Options become 100% vested. In
22<PAGE>
addition, upon the termination of Ronald E. Johnson's employment
Without Cause (as defined in his employment agreement), all of Mr.
Johnson's Initial Options become 100% vested.
The Initial Options expire, to the extent not exercised, on
the tenth anniversary of the date of grant. However, upon
termination of an optionee's employment with the Company, all
unvested Initial Options lapse, and all vested Initial Options
expire 180 days after the termination of employment, if such
termination is due to the death, disability or retirement of the
optionee, or 45 days after the termination of employment, if such
termination is due to any other reason, other than a termination
for cause. If a termination for cause occurs, all vested and
unvested Initial Options expire immediately.
Tax Consequences
The Initial Options are nonqualified stock options for Federal
income tax purposes. Accordingly, the grant of the Initial Options
had no tax consequences for either the optionee or the Company.
Upon the exercise of the Initial Options, the optionees will
realize ordinary income in an amount equal to the excess of (a) the
fair market value (on the exercise date, or, in the case of
optionees whose sale of the underlying Common Stock at a profit
could subject such optionees to suit under section 16(b) of the
Securities Exchange Act of 1934, the later of the exercise date, or
six months after the date of grant) of the underlying shares of
Common Stock acquired over (b) the exercise price. The Company
will be entitled a deduction in an amount equal to the amount
included as ordinary income by the optionee.
Stock Valuation
As of October 13, 1995, the average of the high ask and low
bid prices of the underlying Common Stock was $23.75 per share, as
reported on the Nasdaq Small Cap Market.
Required Vote for Stockholder Approval
The affirmative vote of the holders of a majority of the
Common Stock entitled to vote, and present in person or represented
by proxy, is required to approve or ratify the acts of the Board of
Directors in adopting the Key Employee Plan and all actions taken
by the Stock Option Committee in granting options, including the
Initial Options, thereunder. For purposes of determining whether
Proposal 4 has been adopted, abstentions will be counted as votes
against the proposal, and broker nonvotes will not be counted in
23<PAGE>
determining the number of shares entitled to vote and present in
person or represented by proxy.
If the holders of a majority of the Common Stock entitled to
vote, and present in person or represented by proxy, vote in favor
of the Key Employee Plan, then the same shall be deemed to have
been approved by the stockholders. In the event that the
affirmative vote of a majority of such shares is not obtained, the
Key Employee Plan and the Initial Options shall become null and
void, except to the extent otherwise determined by the Board of
Directors.
It is the intention of the persons named in the enclosed form
of proxy to vote such proxy, unless otherwise instructed, "FOR"
Proposal 4.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1996
Annual Meeting of Stockholders must be received at the Company's
executive offices prior to July 31, 1996 for consideration for
inclusion in the Proxy Statement and form of proxy relating to that
meeting.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
At the date of this Proxy Statement, the Board of Directors
knows of no other matter other than the matters described herein
that will be presented for consideration at the meeting. However,
if any other business shall properly come before the meeting, all
proxies signed and returned by stockholders will be voted in
accordance with the best judgment of the persons voting the
proxies.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report of the Company to its stockholders for the
fiscal year ended July 30, 1995 is being mailed with this Proxy
Statement to the stockholders entitled to vote at the Annual
Meeting. Copies of the Company's audited financial statements for
such fiscal year are included in such Annual Report.
By order of the Board of Directors:
/s/ Raymond P. Springer
-----------------------------------
Raymond P. Springer
Secretary
Dated: November 17, 1995
24
<PAGE>
APPENDIX
Stock Performance Graph: Page 19 of the paper format version of the
foregoing document contains graphical material
which is omitted from the electronic version
in reliance upon section 232.304 of Regulation
S-T.
A description of the omitted graphical material is
set forth on page 17 hereof.
<PAGE>
PROXY CARD
KASH N' KARRY FOOD STORES, INC.
6422 Harney Road
Tampa, Florida 33610
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronald E. Johnson and Raymond P.
Springer as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to vote as designated below, all the shares of Common
Stock of Kash n' Karry Food Stores, Inc. held of record by the undersigned on
November 10, 1995 at the annual meeting of stockholders to be held on
December 6, 1995 or any adjournment thereof.
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees
listed below [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
Everett L. Buckardt Jennifer Holden Dunbar Ronald E. Johnson
John G. Danhakl Ben Evans Robert Spiegel
John J. Delucca Thomas W. Harberts Peter Zurkow
2. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND, L.L.P. as
independent auditors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE ADOPTION OF A NON-EMPLOYEE DIRECTOR STOCK OPTION
PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. PROPOSAL TO RATIFY THE ADOPTION OF A KEY EMPLOYEE STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THIS MEETING.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
DATED: _________________________, 1995 ______________________________________
PLEASE VOTE, SIGN, DATE, AND Signature
RETURN THE PROXY CARD USING
THE ENCLOSED ENVELOPE. ______________________________________
Signature if held jointly<PAGE>
[KASH N' KARRY FOOD STORES, INC. LETTERHEAD]
November 17, 1995
To our Stockholders:
On behalf of the Board of Directors and management of Kash n' Karry Food
Stores, Inc., I cordially invite you to attend the Annual Stockholders
Meeting to be held on Wednesday, December 6, 1995 at 9:00 A.M. Eastern Time
at the Sheraton Inn Tampa, 4701 E. Hillsborough Avenue, Tampa, Florida.
The notice of meeting and proxy statement accompanying this letter describe
the specific business to be acted upon.
In addition to the specific matters to be acted upon, there will be an
opportunity for questions of general interest to the stockholders.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend in person, you are requested to vote, sign, date, and
promptly return the enclosed proxy in the envelope provided.
Sincerely yours,
/s/ Ronald E. Johnson
-----------------------
Ronald E. Johnson
Chairman of the Board,
President and Chief
Executive Officer
